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Chapter 7 Analyzing Consumer Markets and Buyer Behavior 7-1 Copyright © 2003 Prentice-Hall, Inc. Chapter Objectives In this chapter, we focus on two questions: How do the buyers’ characteristics – cultural, social, personal, and psychological – influence buying behavior? How does the buyer make purchasing decisions? 7-2 Copyright © 2003 Prentice-Hall, Inc. Influencing Buyer Behavior The field of consumer behavior studies how individuals, groups, and organizations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and desires. Understanding consumer behavior and “knowing customers” is never simple. Studying customers behavior provides clues for developing new products, product features, prices, channels, messages, and other marketing mix elements. 7-3 Copyright © 2003 Prentice-Hall, Inc. Influencing Buyer Behavior A Consumer’s buying behavior is influenced by: Cultural factors Social factors Personal factors Psychological factors 7-4 Copyright © 2003 Prentice-Hall, Inc. (1) Cultural Factors: Culture, subculture and social class are important in buying behavior. Culture is the fundamental determinant of a person’s wants and behavior. Each culture consists of subcultures that provide more specific identification and socialization for their members (nationalities, religions, racial groups, geographic regions) Social classes are those divisions in the community who share the same values, interests and behavior. Social classes reflect income, education, occupation and residence. Social classes differ in dress, speech patterns, recreational preferences and many other characteristics. Social classes show distinct product and brand preferences in many areas including clothing, home furnishings, leisure activities and autombiles. 7-5 Copyright © 2003 Prentice-Hall, Inc. (2) Social Factors: Reference Groups: Consumer’s buying behavior is influenced by social factors as reference groups, family, and social roles and statuses. Membership groups are groups having a direct influence on a person (family, friends, neighbors and co-workers) with whom the person interacts continuously and informally. Secondary groups takes more formal and requires less continuous interaction (religious, professional and trade unions). Reference groups influence a person’s buying behavior by exposing him to new behavior or lifestyles, brand choice and self concept. People influenced by groups to which they do not belong (Aspirational groups & dissociative groups). Opinion leader is the person who offers advice or information about a specific product or service. 7-6 Copyright © 2003 Prentice-Hall, Inc. (2) Social Factors: Family: Family is the most important consumer-buying organization in society, and family members constitute the most influential primary reference group. There are to kinds of families in buyer’s life: family of orientation (parents and siblings), and family of procreation (spouse and children). Internet ethics for targeting kids. Roles and Statuses: A role consists of the activities a person is expected to perform. Each role carries a status. People choose products that communicate their roles and statuses. 7-7 Copyright © 2003 Prentice-Hall, Inc. (2) Personal Factors: Age and stage in the life cycle: People buy different goods and services over a lifetime. Marketers should pay close attention to changing life circumstances, divorce, widowhood, remarriage and their effect on consumption. Occupation and economic circumstances: Consumption and buying behavior influenced by occupation, income, savings, debts, borrowing power. Lifestyle: Marketers should search for relationship between their products and lifestyle groups. Psychographics is the science of using psychology and demographics to better understand consumers. 7-8 Copyright © 2003 Prentice-Hall, Inc. (2) Personal Factors: Personality and self-concept: Consumers are likely to choose brands whose personalities match their own. Brand personality is the specific mix of human traits that my be attributed to a particular brand. Self-concept theory has had a mixed record of success in predicting consumer responses to brand images. 7-9 Copyright © 2003 Prentice-Hall, Inc. Psychological Factors Motivation Perception Learning Beliefs and attitudes 7-10 Copyright © 2003 Prentice-Hall, Inc. Psychological Factors Motivation: A need becomes a motive when it is aroused to a sufficient level of intensity. A motive is a need that is sufficiently pressing to drive the person to act. Three theories of human motivation for consumer analysis and marketing strategy: Freud’s Theory. Maslow’s Theory. Hersberg’s Theory. 7-11 Copyright © 2003 Prentice-Hall, Inc. Psychological Factors Freud’s Theory: Psychological forces are unconscious and a person can’t understand his own motivations. Laddering technique: trace a person’s motivations from the instrumental ones to the more terminal ones. Methods used to uncover deeper motives are: word association, sentence completion, picture interpretation and role playing. 7-12 Copyright © 2003 Prentice-Hall, Inc. Psychological Factors Maslow’s Theory: helps marketers understand how various products fit into the plans, goals, and lives of consumers. 7-13 Copyright © 2003 Prentice-Hall, Inc. Psychological Factors Herzberg’s Theory Dissatisfiers: factors that cause dissatisfaction. Satisfiers: factors that cause satisfaction. The absence of disatisfier is not enough, satisfiers must be actively present to motivate a purchase. Two implications of the theory: Sellers should avoid disatisfiers. Manufacurers should identify the major satisfiers of purchase in the market and then supply them. 7-14 Copyright © 2003 Prentice-Hall, Inc. Psychological Factors Perception In marketing, the people’s perceptions are more important than the reality. People differ in their perceptions of the same object because of three perceptional processes: 1. Selective attention People are more likely to notice stimuli than relate to a current need People are more likely to notice stimuli than they anticipate People are more likely to notice stimuli whose deviations are large in relation to the normal size of the stimuli Selective distortion Selective retention 7-15 Copyright © 2003 Prentice-Hall, Inc. Psychological Factors Learning Learning is produced through the interplay of drivers, stimuli, cues, responses, and reinforcement. A drive is a strong internal stimulus impelling action. Cues are minor stimuli that determine when, where, and how a person responds (ex. IBM). Discrimination means that a person has learned to recognize differences in sets of similar stimuli and can adjust responses accordingly. Marketers should build up demand for a product by associating it with strong drives, using motivating cues, and providing positive reinforcement. 7-16 Copyright © 2003 Prentice-Hall, Inc. Psychological Factors Beliefs and Attitudes A belief is a descriptive thought that a person holds about something. Attitude is a person’s enduring favorable or unfavorable evaluations, emotional feelings, and action tendencies toward some object or idea. People’s beliefs about a product or brand influence their buying decisions. Brand beliefs exist in consumer’s memory. A company should fit its product into existing attitudes rather than to try to change people’s attitudes. 7-17 Copyright © 2003 Prentice-Hall, Inc. The purchase of a product from a Company A turns out to be a positive experience. You are looking for a loosely related product, which is also offered by Company A. Do you assume that you will again have a positive experience with Company A’s offering, or do you look for the “best of breed,” regardless of which company offers it? 7-18 Copyright © 2003 Prentice-Hall, Inc. The Buying Decision Process Buying Roles Initiator: suggest the idea of buying. Influencer: whose views influence the decision. Decider: who decide whether, what, how, where to buy. Buyer: who makes the actual purchase. User: consumes/uses the product/service. Buying behavior Consumer decision making varies with the type of buying decision. 7-19 Copyright © 2003 Prentice-Hall, Inc. Table 7.3: Four Types of Buying Behavior High Involvement Low Involvement Significant Differences between Brands Complex buying behavior Variety-seeking buying behavior Few Differences between Brands Dissonance-reducing buying behavior Habitual buying behavior 7-20 Copyright © 2003 Prentice-Hall, Inc. What marketers can do? (strategies) Complex Buying Behavior Understand consumers’ information gathering ad evaluation behavior. Assist buyer to learn about the product’s attributes and importance. Differentiate brand’s features, use print media and motivate sales personnel. Dissonance-Reducing Buyer Behavior Marketing communication should supply beliefs and evaluations that help buyer feel good about his/her brand choice. Habitual Buying Behavior Use price and sales promotions to stimulate product trial (TV advertising). Variety-Seeking Buying Behavior Offering lower prices, deals, coupons, free samples and advertising. 7-21 Copyright © 2003 Prentice-Hall, Inc. Stages in the Buying Decision Process How marketers learn about the stages? Introspective method: think about how they themselves would act. Retrospective method: interview a small number of recent buyers and ask them to recall the events making their choice. Prospective method: locate consumers who plan to buy and ask them to think out loud about their buying process. Prescriptive method: ask consumer about the ideal way to buy. Understanding by mapping the customer’s Consumption system Customer activity cycle Customer scenario Metamarket Metamediaries 7-22 Copyright © 2003 Prentice-Hall, Inc. Stages of the Buying Decision Process Problem recognition Information search Personal sources Commercial sources Public sources Experiential sources Figure 7.4: Five-Stage Model of the Consumer Buying Process 7-23 Copyright © 2003 Prentice-Hall, Inc. Figure 7.5: Successive Sets Involved in Customer Decision Making 7-24 Copyright © 2003 Prentice-Hall, Inc. The Buying Decision Process Evaluation of Alternatives There is no single process used by one/all consumers in all buying situations. Brand beliefs Brand image 7-25 Copyright © 2003 Prentice-Hall, Inc. The Buying Decision Process Purchase Decision Figure 7.6: Steps Between Evaluation of Alternatives and a purchase decision 7-26 Copyright © 2003 Prentice-Hall, Inc. The Buying Decision Process Informediaries Consumer Reports Zagats Unanticipated situational factors Perceived risk Brand decision Vendor decision Quantity decision Timing decision Payment-method decision 7-27 Copyright © 2003 Prentice-Hall, Inc. The Buying Decision Process Postpurchase Behavior Postpurchase Satisfaction Disappointed Satisfied Delighted Postpurchase Actions Postpurchase Use and Disposal 7-28 Copyright © 2003 Prentice-Hall, Inc. Figure 7.7: How Customers Dispose of Products 7-29 Copyright © 2003 Prentice-Hall, Inc.